The other day whilst visiting my father I ran into a good friend of his called Chris who I hadn't seen for a while. Amongst many other conversations that we shared that afternoon he mentioned that he had purchased a mobile phone from Telstra a few years ago and was still paying $30 per month for it.
I began to explain to Chris what that $30 per month covered, ie the cost of the phone plus an allowance for the calls that are included with the plan. I also mentioned that whilst his contract may have actually ended, he was still paying the same amount, ie the cost of the phone.
I asked Chris if he had been contacted by Telstra and he then began to explain that he recently visited a Telstra store and had enquired about his phone plan. The consultant at the store had explained that he was free to leave at anytime but that it was unlikely that Telstra would have notified him of his contract coming to an end. They wouldn't want to see him go.
I guess I can see the logic in that, but I can also see an opportunity to make the customer stay by offering them something that would keep them.
Chris was annoyed that he was still paying a premium on his plan for the cost of the phone given his contract had finished and he had completed paying the phone off. Following a few question regarding his phone use (which was quite low and typical of a pensioner) my advice to him was to switch to a prepaid mobile plan.
We looked at a few plans offered by Telstra, and given he was familiar with the local store and a consultant working there, I advised that he move to a prepaid mobile plan with a long expiry that Telstra offered. This would ensure that the transfer of his mobile number was easy and the he could continue to enjoy the coverage offered by Telstra.
What I also worked out for Chris was that a switch to prepaid would save him $240 this year. Rather than pay $30 per month ($360 pa) his two $60 prepaid recharges with 180 credit each would cover him for a whole year and only cost a total of $120.
The process is called inertia (mean leaving this unchanged) and many service providers like telecommunications companies make a lot of money out of it. By not notifying customers when their mobile contract ends, the customer stays on paying a higher amount for longer.
My Name is Ranya Georgalas and I enjoy blogging about all sorts of topics. I work in Marketing, Social Media and Affiliate Marketing. I started blogging several years ago and now I own many blogs. The most popular being http://prepaidplans.com.au/2008/08/optus/
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